Post-trade income drives LSEG revenue growth

The London Stock Exchange Group has announced a 9% rise in revenue to £328.1 million in its results for the six months ending 31 September 2011, which it attributes to greater diversification of its business.

The London Stock Exchange Group (LSEG) has announced a 9% rise in revenue to £328.1 million in its results for the six months ending 31 September 2011, which it attributes to greater diversification of its business.

The group’s post-trade earnings rose by 68% to £106.7 million, driven by greater clearing volumes and treasury income from its central counterparty business, the latter of which contributed heavily to a 20% increase in the exchange’s total income.

The growth in treasury income was attributed by LSEG to the higher level of margin held and improved spreads on cash collateral put on deposit.

Turquoise, the pan-European multilateral trading facility (MTF) acquired by LSEG in 2010, cemented its place the second largest MTF in lit and dark markets, with an overall market share of 5.8% in October, according to figures provided by Thomson Reuters.

The UK exchange reported a 6% increase in derivatives trading volumes on its IDEM platform, as well as a 26% rise in volumes on Turquoise Derivatives. The group began trading FTSE 100 index futures and options on Turquoise in June 2011, with further product additions planned in due course.

The number of new issues on the group’s primary markets also went up by 15% to 102, including 24 international companies, with total capital raised at £23 billion, an increase of 32%. In addition, revenue from the firm’s fixed income trading increased 29% with trading volumes on its MTS fixed income cash markets up 6%. The group’s technology services also grew, with its Sri Lanka-based subsidiary MillenniumIT reporting a 10% increase in revenue.

“Our diversification strategy is delivering,” said Xavier Rolet, CEO at LSEG. “Key highlights include a very good performance from post trade, an area we highlighted in 2009 as a core focus for us and which is now making a significant contribution to both group revenue and growth.”

LSEG also confirmed it is still engaged in exclusive discussions to acquire clearer LCH.Clearnet; the group declined to comment on the expected timeline for concluding the discussions.